Designated Exclusive Jurisdiction Clause Overrides Geographical Venue of Hearings to Determine Arbitral Seat

The Appellant entered into a Space Buyer’s Agreement (2005) and a subsequent Conveyance Deed (2014) for a shop in Jalandhar, Punjab.

The 2005 agreement mentioned Delhi/New Delhi as a location for proceedings but vested jurisdiction in Jalandhar/Punjab & Haryana High Court.

The 2014 deed allowed the arbitrator to decide the location but explicitly vested exclusive jurisdiction in Jalandhar and the Punjab & Haryana High Court.

In 2022, disputes arose, and the Appellant approached the High Court of Punjab and Haryana under Section 11(6) of the Arbitration Act, which appointed a sole arbitrator.

The arbitrator conducted proceedings in Delhi and passed an award in 2025.

The Appellant challenged the award before the Delhi High Court under Section 34. The Single Judge dismissed the petition for lack of territorial jurisdiction, holding that Jalandhar was the "seat" while Delhi was merely the "venue".

1. Whether the designation of Delhi as a location for proceedings, coupled with the conduct of arbitration in Delhi, constitutes it as the "seat" of arbitration despite an exclusive jurisdiction clause favoring Jalandhar.

2. Whether the Delhi High Court has territorial jurisdiction to entertain a Section 34 challenge when theSection 11(6) appointment was made by the Punjab and Haryana High Court and the contract vested exclusive jurisdiction there.

The Court primarily applied the distinction between "seat" and "venue" as interpreted under Section 2(1)(e) and Section 20 of the Arbitration and Conciliation Act, 1996.

The "seat" is the juridical home of arbitration and acts as an exclusive jurisdiction clause as established in J & K Economic Reconstruction Agency v. Rash Builders India Pvt. Ltd. (2026).

The "closest and most intimate connection" test and the Shashoua principle to determine the seat when ambiguity exists.

The Court reasoned that the arbitration clause must be read as a whole. While the clause allowed flexibility regarding the location (venue) for hearings, the final sentence explicitly mandated that "Courts at Jalandhar alone" would have jurisdiction.

The Court emphasized that in the digital age, the physical venue of hearings is often a matter of convenience and does not automatically shift the juridical seat.

The Court applied the "closest connection" test, noting that: (i) the property is in Jalandhar; (ii) the Section 11 appointment was made by the Punjab & Haryana High Court; and (iii) the Respondent had already filed a Section 34 petition in Jalandhar.

Consequently, the intention of the parties, as evidenced by the word "alone" in the jurisdiction clause, fixed the seat at Jalandhar, rendering Delhi a mere venue.

The Court affirmed the Single Judge's decision, ruling that the conduct of proceedings in Delhi did not confer jurisdiction upon the Delhi High Court. The appeal was dismissed.